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Rishi Sunak’s fight to raise taxes to reform social care is nothing compared to financial battles ahead

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06.09.2021

The UK government’s widely trailed announcement that it will increase national insurance taxes by more than one percentage point to fund reform of the social care system and help fund the NHS has triggered a fierce political debate. Many Conservatives are furious that it means breaking an electoral promise not to raise taxes, while other people, especially on the left, argue it is unfair to tax the young and relatively poor to help older, wealthier pensioners who own their own homes.

Beyond this controversy, there are much broader issues at stake about the future of the UK’s welfare state after a decade of austerity and the ravages of the pandemic. The social-care row is the opening salvo in a debate which will rage until later in the autumn when Chancellor Rishi Sunak announces his comprehensive spending review, which will set the course for the next general election.

The problem for the Conservatives in securing their election victory in the “red wall” constituencies, which used to reliably vote Labour in the north of England, is they are somewhat beholden to them. The government has made promises to its new working-class voters to “level up”, and to impose no more austerity.

Boris Johnson also pledged to reform social care during the 2019 election, to improve a system that requires most people to sell their houses to pay for care in old age despite having paid taxes all their lives. This will cost over £10 billion a year.

Yet the chancellor has set out a tough set of fiscal targets to tackle the huge budget deficit built up during the pandemic. The government has racked up a debt........

© The Conversation


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